Genting Malaysia (4715), a crisis or opportunity? (Part 3)
Is GENM a good buy now? As a value investor, I only invest in a company if the company is cheap enough. So, how do we define whether the company is cheap enough? Normally, i will use P/E to come out with the reasonable price of the company, to determine whether it's overvalued or undervalued. P/E ratio Historical Average P/E (5 years): 12.93x Industry P/E: 19.7x (based on TA Research Report @ 28/2/2020) CAGR + DY: 12.72x GENM's P/E on 21 April 2020 is 10x. Compare to historical, industry P/E and CAGR+DY, the current P/E is considered low. However, after factor in the earnings affected due to Covid-19, the current P/E is reasonable. Hence, it share price is not really attractive at the moment. I have roughly calculated the EPS for 2020. I have estimated GENM's business will reduce for 6 months after the lockdown due to cautious of the Covid-19 virus. And i expect the business will increase on November and December due to school holiday. Based on th...
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